Webley Corp

Webley Corp. is considering two expansion options, but does not have enough capital to undertake both. Project W requires an investment of $100,000 and has an NPV of $10,000. Project D requires an investment of $80,000 and has an NPV of $8,200. If Webley uses the profitability index to decide, it would

A) choose D because it has a higher profitability index.
B) choose W because it has a higher profitability index.
C) choose D because it has a lower profitability index.
D) choose W because it has a lower profitability index.

Correct Answer:

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